Employers cannot withhold gratuity of retired employees: HC

Factories, mines, oilfields, plantations, ports, shops and other establishments with ten or more employees cannot withhold payment of gratuity to its retired employees by holding them responsible for financial loss, the Madras High Court has ruled.

Justice K. Chandru passed the ruling while dismissing two writ petitions filed in the Madurai Bench by the Chairman and Managing Director of Tamil Nadu Civil Supplies Corporation challenging orders passed by a Joint Commissioner of Labour to pay gratuity to two of its retired employees.

“Whatever may be the claim made by the petitioner management, it is not as if it has no machinery to recover the amount as there are other machineries either under service law or in civil law for recovering the amount. But on that score, the gratuity payable is not liable for attachment,” he said.

The judge pointed out that Section 13 of the Act stated that gratuity payable under the legislation was not liable to attachment in execution of any decree or order of any civil, revenue or criminal court. “Even Section 14 of the Act provides overriding effect over other laws,” he added.

Mr. Justice Chandru also said that Section 4 (6), the only provision which provides for forfeiture of gratuity amount to the extent of damage or loss caused to the employer, states that the money could be withheld only if the services of the employee had been terminated for wilful omission or negligence. Out of the two writ petitions before the court, one related to G. Packirisamy, a rice mill operator who was accused of short out turn of rice from the paddy given to him for hulling. He retired on July 31, 2001 but his gratuity was not paid.

The other case related to P. Dakshinamoorthy, a boiler operator who retired in 1995.